Raiffeisenbank (Bulgaria) EAD published its monthly economic review where the statistical data available by the end of September are commented. The analysis takes account of the better-than-expected GDP data for the first two quarters of 2012 г. It notes that in the current year the main engine of of the economic recovery has been domestic demand, as in the first half of the year consumption increased in real terms by 3.2% yoy, and investment by 9.8%.
„The economic developments since the beginning of the year led us revise our 2012 GDP forecast from 1.0% to 1.5%. Although the change is by only 0.5 percentage points, it reflects the more favourable development of the indicators compared to our spring outlook,” commented Raiffeisenbank’s Chief Economist Kaloyan Ganev. „In the second half of the year we also expect to have a continuation of those dynamics, although at lower rates, and for the whole year we foresee a growth rate of consumption of about 3.5%, and 5.8% of investment”, he said. Raiffeisenbank’s 2013 economic growth forecast has been reduce, the change reflecting two factors: on the one hand, the higher 2012 growth rate as a base effect, and the continuing uncertainty in the Eurozone following the lack of a lasting solution to sovereign debt issue, on the other. “At least until the middle of 2013 the Eurozone will perform weakly, which will also affect our exports. However, in case that the ECB measures have a more tangible stabilizing effect in the markets, we could see even better developments next year”, Ganev added.

In the analysis of Raiffeisenbank it is also mentioned that in August the inflation rate normalized after the relatively abrupt price level increase in July, while the unemployment fell marginally solely due to seasonal effects, without practically seeing a sizable influence of economic growth on the labour market. A better-than-projected state budget performance is also taken note of.